- LATIN AMERICA
- MIDDLE EAST
- United Kingdom
- United States
- New Zealand
- South Africa
By Jerimiah Yap
London, United Kingdom
The global economic downturn is affecting national governments, companies, business, and ordinary citizens.
It basically affects everything and everyone - except the super-rich.
The super-rich keep their wealth and stay unaffected by the struggling global economy by employing secret tax havens. A study called The Price of Offshore Revisited reveals that the hidden amount of the super-rich is vast and is estimated to be at least $21 trillion. The study was written by former chief economist James Henry, whose previous experience includes working at research and consultancy firm McKinsey.
However, John Whiting, tax expert and United Kingdom government adviser, contested Henry's study and came to the conclusion that the $21 trillion figure is not accurate.
But Henry reiterated his point and declared that the $21 trillion estimate is actually a conservative estimation. Henry's study gathered figures from the World Bank, national governments and International Monetary Fund.
Henry said via the BBC: "The lost tax revenues implied by our estimates is huge. It is large enough to make a significant difference to the finances of many countries. From another angle, this study is really good news. The world has just located a huge pile of financial wealth that might be called upon to contribute to the solution of our most pressing global problems."
The report he wrote involves the "financial wealth deposited in bank and investment accounts, and not other assets such as property and yachts."
Henry believes the wealthy have been hiding their money in offshore accounts since the 1970s and the offshore money isn't on file with local governments.
Henry's findings show that an estimated $12 trillion is stashed by private clients in 50 leading private banks. He even named the three banks that held the most offshore assets - Credit Suisse, Goldman Sachs and UBS.
Henry adds, "That if tax havens were stuffed with such sizeable amounts, you would expect the havens to be more conspicuously wealthy than they are."
21 Trillion Dollars Hidden in Tax Havens | News of the World